Problem 1 In the following scenarios, is the good described a normal good, an inferior good, or is there not enough information to say? Briefly justify your answer. a) Richard's income doubles and he goes from buying 4 apples per week to buying 5 apples per week. The prices of apples and any related goods do not change. b) Terri's income goes down by 50% and she goes from buying a bottle of tequila every week to buying one every month. At the same time, the price of tequila doubles. c) The price of potatoes goes up by 20% and Seamus buys 10% more potatoes. His income and the prices of related goods do not change. Hint: think about this one in the context of another topic you learned about this week.
Problem 1 In the following scenarios, is the good described a normal good, an inferior good, or is there not enough information to say? Briefly justify your answer. a) Richard's income doubles and he goes from buying 4 apples per week to buying 5 apples per week. The prices of apples and any related goods do not change. b) Terri's income goes down by 50% and she goes from buying a bottle of tequila every week to buying one every month. At the same time, the price of tequila doubles. c) The price of potatoes goes up by 20% and Seamus buys 10% more potatoes. His income and the prices of related goods do not change. Hint: think about this one in the context of another topic you learned about this week.
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 1.2P
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Transcribed Image Text:Problem 1
In the following scenarios, is the good described a normal good, an inferior good, or is there not
enough information to say? Briefly justify your answer.
a) Richard's income doubles and he goes from buying 4 apples per week to buying 5 apples
per week. The prices of apples and any related goods do not change.
b) Terri's income goes down by 50% and she goes from buying a bottle of tequila every
week to buying one every month. At the same time, the price of tequila doubles.
c) The price of potatoes goes up by 20% and Seamus buys 10% more potatoes. His income
and the prices of related goods do not change. Hint: think about this one in the context
of another topic you learned about this week.
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